Five city projects receive historic tax credits

By Michael Dresser, The Baltimore Sun

A century-old Station North movie theater, an East Baltimore church, a former cotton mill and two downtown office towers are among the renovation projects selected for financing next year under Maryland's historic preservation tax credit program.

At a news conference in the long-dormant Parkway Theatre on North Avenue, Lt. Gov. Anthony G. Brown announced Monday that 10 projects — five of them in Baltimore — will receive $10 million in tax breaks to help finance restoration projects.

Brown and other O'Malley administration officials used the announcement to build support for the 17-year-old Sustainable Communities Tax Credit program, which is up for reauthorization by the General Assembly in the session that begins next month.

Brown, a candidate for governor, said the state's $10 million investment will help spur about $121 million in construction and create 722 jobs.

The Parkway, one of the grandest of the nation's movie palaces when it opened in 1915, will receive a $2 million tax credit to help finance an $8 million renovation. The project is expected to bring the building, which closed in the late 1970s, back to life as a three-screen theater and year-round home of the Maryland Film Festival, which recently acquired the building from the city for $1.

Jed Dietz, director of the Maryland Film Festival, estimated that it will take 16-18 months to rehabilitate the badly deteriorated building with its soaring dome and ornate balcony.

"We would like to be able to open the doors on its 100th anniversary, but we want to do it right," he said.

The largest of the projects receiving the credit is the $75 million renovation of the Baltimore Trust Company Building at 10 Light St., which will receive a $3 million credit for the office building's conversion into 445 rental apartments and 40,000 square feet of street-level retail space.

The 34-story building, which opened in 1929 as the tallest structure in the country south of New York City, has been vacant since Miles & Stockbridge and Bank of America moved out last year, said developer Cary Euwer.

"It's clearly a landmark," he said.

Euwer said the apartments will be leased at market rates, with the "tower" floors from 23 to 34 commanding higher prices.

"The tower floors have incredible views of the harbor and the city," he said.

Euwer said the state tax credit — combined with a similar federal break — is essential to the financing of the project. He said renovation projects typically generate 50 percent more jobs than new construction. The Baltimore Trust project is expected to create more than 200 jobs.

The other downtown tower to receive a credit next year will be the landmark Bromo Seltzer Tower at 21 S. Eutaw St., which was awarded a $500,000 break to help with the $2.5 million renovation of its exterior.

The state also awarded a credit of almost $1.5 million for a $7.3 million project to renovate the deconsecrated St. Michael the Archangel Catholic Church complex in the 1900 block of East Lombard St. in the Upper Fells Point area into apartments and office space.

Charles Belfoure, architect and historical consultant on the St. Michael's project, said the complex includes the late 19th century church as well as its school, rectory and parish hall. He said the church, which closed in 2011, would be used for the performing arts while the other structures will be used for 46 rental housing units.

Another city project that will receive the tax credit will convert the old Whitehall Cotton Mill — part of the Clipper Mill complex in Hampden-Woodberry — to residential and commercial use. The project, expected to cost $17.3 million, was awarded a $584,191 credit. The development recently lost its eligibility for a federal tax credit that helped fund earlier phases of the Clipper Mill renovation because of the neighborhood's growing affluence.

Maryland Secretary of Planning Richard Hall said past projects financed in part by the tax credit program have been "game-changers" for their neighborhoods. He pointed to the American Can and Tindeco Wharf projects in Canton and the old Procter & Gamble building in Locust Point — now the headquarters of Under Armour.

"This is kind of smart growth you can reach out and touch," he said.

The tax credit program is capped at $10 million. Hall said the amount is set by the legislature each year as part of the appropriations process. Projects compete for the credits and are scored on such criteria as financial viability and the urgency of the need for preservation.

Hall said he did not know whether Gov. Martin O'Malley would seek to expand the program or merely reauthorize it at current levels. He said that will be announced next month as part of the governor's budget.

Baltimore, with the state's largest inventory of historic but dilapidated buildings and a concentration of rehab-oriented developers, has long been the program's largest beneficiary. However, the program also has helped renovate historic structures in some of Maryland's smaller cities. Next year's credit recipients include three projects on the Eastern Shore, one in Sykesville and one in Cumberland.

"We were very pleased this year that we got a large proportion of applications from around the rest of the state," said Rodney Little, director of the Maryland Historical Trust.

The Sykesville project involves the $3.9 million renovation of a former dormitory at the state mental hospital complex as office space. The Cumberland project — the largest outside Baltimore — will renovate the old Cumberland Arms railroad hotel as apartments for an estimated $5.8 million. The three small Shore projects are in Cambridge, Chestertown and Federalsburg.

Little said the program is geared toward cities where commercial real estate prices have fallen.

"It helps reverse disinvestment," he said.

Supporters of the Parkway Theatre project at Charles Street and North Avenue said the renovation will give a boost to the Station North arts and entertainment district, which has undergone a turnaround in recent years.

Mayor Stephanie Rawlings-Blake and the Baltimore Development Corp. have selected the Maryland Film Festival's proposal for the renovation of the historic Parkway Theatre at 3 W. North Ave., according to an official who spoke Thursday morning at the BDC's monthly board meeting.